Place Your Bets: How to Build a Proactive Team & Procurement Organisation
The topic of "how to build a proactive team and procurement organisation" was recently explored by PROACTIS at an executive roundtable, Monte Carlo Resort, Las Vegas. After much debate, senior procurement and supply chain executives were asked to place their chips on five key areas for achieving success. The results:
1. Understand your business. Review the company's strategic business objectives – know what your company does and how it makes profitability. Understand how purchasing happens in the organisation. Align priorities and resources to the business plan and not just revenue generation. Focus energies on how to impact the bottom line and ultimately shareholder value (or if you are in the public sector, return from budget).
2. Define and deliver value. Translate the definition of “value” to the rest of the organisation and use this as a basis to justify headcount moving forwards. Simplify procurement language and talk in speak that Finance and the rest of that organisation understands.
3. Be results orientated. In small companies the delivery of results is much more transparent. However, in larger companies you have a lot of "heads in the middle" and it is easy to lose focus. Ask questions repeatably and challenge the status quo. Define the metrics that each procurement practitioner should have to evaluate their performance (cash savings, redistributed savings, cost avoidance and the value from lost, obsolete or redundant suppliers etc). Explain the most effective reporting approach.
4. Build talent. Accomplish through others. Spend a large proportion of your time building talent, skills and capacity in procurement. Keep the procurement function “alive and kicking” (e.g. rotation schemes for category managers). Ensure your staff are not "controlled" by spend owners. Build succession plans.
5. Automate processes. Remove the grunt work out of the procurement process so more time can be spent delivering value (e.g. demand management, competitive bidding and supplier performance/risk reviews). Take a holistic view of the upstream and downstream procure-to-pay processes. Automation can ultimately help you "do more for less" and focus your talent more effectively.
What’s your view on the most critical ways to achieve success? Will their bets come good?
If you haven't yet "created" a space at the C-level table then try exploring these five areas. It may just be your ticket for success!